Tuesday, November 13, 2012

Taiwan scandal linked to state stock investment

TAIPEI, Taiwan (AP) ? Taiwanese authorities are investigating the operations of four state-owned funds that incurred huge losses on the local stock markets in the wake of a scandal involving one of them, the premier said Tuesday.

Premier Sean Chen said financial regulators are looking into massive stock transactions made with money from the funds to try to detect any irregularities. The funds lost a total of 90 billion New Taiwan dollars ($3.1 billion) in stock trading last year.

Last week, prosecutors accused a dealer of ING Securities ? a member of the ING Group ? of breach of trust in handling stock investments on behalf of a government labor pension fund.

It charged Hsieh Ching-liang of buying into a listed company's stock when its price was low via dummy accounts, and then using government money to artificially inflate the stock's price so he could make money on his original purchases.

Hsieh denied any wrongdoing, but ING Securities executives agreed to reimburse NT$200 million ($6.9 million) to the pension fund.

The Taiwan government has long used state funds to buoy lackluster markets to help "stabilize" share prices.

They normally make profits when prices later recover or surge.

Taiwan's stock market index has lost more than 3 percent over the past 12 months.

Source: http://news.yahoo.com/taiwan-scandal-linked-state-stock-investment-101715041--finance.html

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